Punjab proposes higher sales tax on restaurant card, digital payments

LAHORE: The Punjab government has proposed increasing the sales tax rate on restaurant bills paid through debit cards, credit cards and digital payment channels as part of its revenue measures for the upcoming fiscal year.

Under the proposal, customers using electronic payment methods at restaurants could face a higher tax rate compared to the existing structure if the measure receives legislative approval.

The move is part of broader efforts by the provincial government to increase tax revenues and strengthen fiscal resources amid rising expenditure requirements.

Restaurant owners and industry representatives have expressed concerns that higher taxation on digital transactions could discourage electronic payments and affect efforts to promote a documented economy.

The proposal has also drawn attention because governments in recent years have generally encouraged digital payments to improve transparency, reduce cash transactions and expand tax documentation.

Officials maintain that the measure remains under consideration and will be subject to approval through the provincial budget process.

If approved, the revised tax rates would apply to restaurant bills paid through banking channels and other digital payment methods across Punjab.